The xAI logo is seen on a mobile device in this photo illustration on July 13, 2023 in Warsaw, … [+]
The richest man in the world is building a super-intelligent AI to understand the true nature of the universe. This is what the project means for investors.
Elon Musk hosted a Twitter Spaces event in early July to unveil X.ai, his new AI company. X.ai researchers will focus on science, while creating applications for businesses and consumers.
To participate, investors must continue to purchase Arista Networks
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When ChatGPT launched in December 2022, its popularity shocked executives at major tech companies. The OpenAI app quickly became the fastest ever to attract one million active monthly users, breaking previous records set by Facebook, Instagram and even Tik Tok. Similar website reported in July, chat.openai.com reached 1.8 billion monthly visits.
The infrastructure required to keep ChatGPT running smoothly is mind-boggling.
The application runs in the Microsoft
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Analysts at New Street Research estimated in February that the cost of providing ChatGPT to Microsoft Bing users required an initial infrastructure investment of $4 billion. This price will increase as the product is rolled out to more users, according to a report has CNBC.
These costs represent a significant barrier to entry for competitors.
Musk knows this. He also understands that the right to the product will be worth billions in monthly sales.
It joined the AI arms race in April when X.ai was founded and the company purchased thousands of Nvidia GPUs. Musk then noted that researchers were working on TruthGPT, an uncensored chatbot, a counterweight to chatbots built by OpenAI, Google.
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During Twitter spaces event in July, he said X.ai researchers previously worked at OpenAI, Google Research, Microsoft Research and DeepMind. Collectively, they have contributed to key advances in AI such as AlphaStar, AlphaCode, Inception, Minerva, GPT-3.5 and GPT-4, Transformer-XL, autoformalization, memoization transformer, batch size scale and μTransfer. Musk also said that the first app under the X.ai banner was expected in just a few weeks.
Investors should focus on companies that sell the basic equipment needed to bring usable products to market.. These companies are the main beneficiaries of the AI arms race.
Arista Networks makes ultra-fast network switches that accelerate communications between AI server racks. These switches need to be upgraded as cloud-based applications such as ChatGPT become more popular. The key to delivering better user experiences with low latency.
Rapidly moving customer data is a big part of Arista’s origin story. Saint Clare. The Californian company became famous in September 2008 after the bankruptcy of Lehman Brothers, one of its main clients. Arista quickly deployed low latency systems for other financial customers, reducing milliseconds to nanoseconds. These vertical systems combined hardware with a programmable software stack. Customers were able to weather the financial crisis.
Modern AI workloads are the next big opportunity for Arista.
According to an Arista blog post, AI networks now operate at petabyte scale, or 1,024,000 gigabytes. These applications push the boundaries of what is currently possible with hardware alone.
There is ample evidence that this process is underway. Two important Arista customers, Metaplatforms (META) and Microsoft, have started preparing for 2021 by modernizing their data centers. This process is ongoing and other deep-pocketed players will follow as they deploy chatbots and AI strategies for enterprise clients.
X.ai is now clearly one of these players.
Meta Marshall, analyst at Morgan Stanley
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At a stock price of $165.58, Arista shares trade at 24.6x forward earnings and 10.7x sales. While this may seem expensive, the compound annual revenue growth rate over the past five years is 21.6%. Profit margins are 31.2%. The next five years should be even better.
You can buy Arista stock in case of future weakness.
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